As part of the #Eakinomics video series, the American Action Forum (@AAF) today released a new video that explains the economic and labor market ramifications of a minimum wage hike. In the #Eakinomics video, AAF President Douglas Holtz-Eakin explains how a minimum wage hike fails to help those in poverty and results in 6.6 million jobs lost.
Yesterday Puerto Rico defaulted on bond payments for the first time. Financial problems have created a cottage industry analyzing its problems. (See the “Krueger Report” and the “Centennial Report” for opposing views.) At the center of the problem is poor growth in Puerto Rico. As the chart below (reproduced from the Krueger report) shows, Puerto Rico has had negative growth for years — poor growth that cannot be laid at the feet of the Great Recession on the mainland.
• If the Department of Labor’s (DOL) proposed fiduciary rule is implemented, almost all retail investors will see their costs increase by 73-196 percent due to a mass shift toward fee-based accounts. • Firms providing investment advice will see an average of $21.5 million in initial compliance costs and $5.1 million in annual maintenance costs. • Up to 7 million current Individual Retirement Accounts (IRAs) would fail to qualify for an advisory account due to the balance being too low to be profitable for the adviser.
Miscellaneous tariff bills (MTBs) are legislative proposals to reduce or temporarily suspend tariffs or duties on certain imports. Many of these duties are imposed on imports that are used as components in American manufacturing, and the goods generally are not produced in the U.S.
The last MTB expired in December 2012 and Congress has yet to pass another one amid a debate about whether these duty suspensions are considered earmarks. While this argument continues without resolution, U.S. manufacturers face millions of dollars in additional costs, resulting in billions in lost economic activity. The ongoing debate about MTBs and earmarks could be resolved by modernizing the process by which MTBs are submitted.
The old politics of Medicare reform were to demagogue any proposed reform as an attempt to “throw granny off the cliff” for political gain, base motives, or both. These politics were on full display in President Obama’s recent assertion: "Today, we're often told that Medicare and Medicaid are in crisis. But that's usually a political excuse to cut their funding, privatize them, or phase them out entirely -- all of which would undermine their core guarantee.”
The regulatory pace slowed again this week, with just $152 million in total burdens. Annual costs were $131 million, with no quantified benefits. Despite the slow week, however, paperwork accelerated by 2.5 million hours. The Department of Interior’s (Interior) “Stream Protection Rule” led all rulemakings in costs and paperwork.
The Financial Stability Board (FSB) announced yesterday that it was suspending plans to designate large asset managers (e.g., those who manage assets on behalf of others like mutual funds) as Systemically Important Financial Institutions (SIFIs).
The United States continues to experience tepid economic growth, despite the official end of the recession more than 5 years ago.
Today AAF has an event on the “gig economy” and the increasing use of independent contractors, which builds on a recent paper designed to shed light on the magnitude of these labor force developments. For those new to the area, there are three interrelated phenomena: (1) the gig economy – workers with alternative work arrangements, (2) the online gig economy – workers who utilize new technologies, markets and platforms for alternative work arrangements, and (3) the “sharing economy” – goods and services that employ under-utilized assets via online marketplaces or decentralized networks.
The 340B drug pricing program requires pharmaceutical manufacturers to provide outpatient medications at steeply discounted prices to certain types of hospitals and health clinics. Intended to provide critical cost savings for hospitals and other entities that provide charitable care for patients without health coverage, eligibility for the largest proportion of entities participating in the program is based on a funding formula that relies on the proportion of Medicare and Medicaid inpatients served by a given hospital. As 340B enters its third decade as part of the federal health funding structure, now is a good time to reevaluate and make sure it is working as intended. This short paper argues that a fundamental change in the formula would better reflect the program’s stated priority.